Hisamitsu Pharmaceutical Group’s Commitment to Sustainability｜Sustainability

Hisamitsu Pharmaceutical Group’s
Commitment to Sustainability

Hisamitsu Pharmaceutical aims to realize a virtuous cycle of “solving social issues” and “sustainable growth of our Company Group” through our business activities. To this end, we have identified Materiality, which is a set of priority issues that our Company Group must address. Through our efforts to address the Materiality, we will contribute to the realization of Sustainable Development Goals (SDGs).

Hisamitsu Pharmaceutical Group's Sustainability Policy

"TE-A-TE" Creates Smiles

Hisamitsu cherishes the "TE-A-TE" culture.
What lies beneath "TE-A-TE" is your compassion for your loved ones.
Such compassion is the starting point of our “patch treatment culture,”
which we have emphasized since our establishment.

One way to spread "TE-A-TE" culture throughout the world is to promote
"patch treatment culture," but our corporate responsibilities are not limited to that.

It is our mission and responsibility as long as it is filled with enthusiasm for
"TE-A-TE" and concerned with customer satisfaction, even if it is in the realm of
non-profit operations or disease/injury prevention.

By contributing to creating happy smiles through a
compassionate "TE-A-TE" culture, we will strive to achieve a
favorable cycle of solving social problems and realizing our
corporate group’s growth.

Sustainability Promotion Structure

In January 2021, we upgraded the CSR Promotion Committee and renamed it the Sustainability Promotion Committee. Chaired by our officer in charge of promoting sustainability, the new committee consists of each department’s sustainability promotion members. In light of the social challenges surrounding Hisamitsu, environmental problems, and requests from a wide variety of stakeholders, the committee endeavors to promote sustainability at the Hisamitsu Pharmaceutical Group.

Hisamitsu Pharmaceutical Group's Sustainability Policy

Identification Process of Materiality

Step1
Identification of social issues

List the social issues to be addressed by referring to international guidelines such as the SDGs and SASB, and survey items from sustainability rating organizations.

Step2
Prioritization of social issues

Map the issues identified in the survey to the two axes, “Expectations of stakeholders” and “Impact of the company's business,” and narrow down the list to those items with the highest priority.

Step3
Validation

Sustainability Promotion Committee, consisting of Directors, Executive Officers, and General Managers of related departments reviewed and confirmed validity of the items.

Step4
Identification of Materiality

Management Advisory Committee and the Board of Directors identified the Materiality, through discussions, as a strategic issue to be addressed.
Going forward, review the Materiality on a regular basis in response to changes in the internal and external business environments.

Hisamitsu Pharmaceutical Group’s Materiality
(Priority Issues)

In 2021, we identified nine materiality points (Priority Issues) to create the common value “TE-A-TE Creats Smiles,” presented in our sustainability policy.
These materiality points (Priority Issues) are divided into the following two categories:

① Materiality related to our contribution to solving social problems by creating new value
② Materiality related to the solution of social problems, social needs, and the foundation for our sustainable growth

While striving to create common value by focusing on these materiality points, we will contribute to establishing a sustainable society.

Materiality related to our contribution to solving social issues by creating new value
Creating products and services with enthusiasm for "TE-A-TE"	・Develop and provide products in response to needs that are irrelevant to patches ・Provide products and services that will contribute to expanding people’s healthy life expectancy	Promoting "patch treatment culture" worldwide	・Promote the benefits of "TE-A-TE” through patches ・Develop further-value-added patches

Materiality related to solving social issues, social demands, and the foundation for sustainable growth of the company
Promoting environmental management	・Reduce CO₂ emissions coming from our business operations ・Reduce our use of plastic and waste generation ・Promote Sustainability procurement throughout our supply chain	Improving medical products, services, etc. and access to information	・Provide products and services worldwide ・Provide various means of purchase depending on customers’ needs ・Provide even more health-related information
Contributing to local communities	・Support cultural, sports, and group activities ・Develop products based on the concept of local production for local consumption	Promoting D&I and work style reform	・Use a wide variety of HRs ・Establish a fulfilling work environment
Supplying high-quality products and services	・Ensure the quality and safety of our products and services ・Improve our products using feedback from customers
Supplying high-quality products and services		Implementing responsible marketing and information collection	・Conduct marketing in compliance with each country’s guidelines ・Collect information on the proper use of medical products and other items
Ensuring legal compliance and reinforce our governance structure	・Enhance the effectiveness of our board of directors ・Increase the awareness of legal compliance ・Eliminate all forms of harassment ・Respond to a wide variety of risks

KPI Setting and FY2022 Progress

For Materiality, which is particularly important for solving social issues and for the sustainable growth of our Company Group, we have established Key Performance Indicators (KPIs) to evaluate our progress over the medium to long term. Progress in FY2022 was as follows: Since FY2023, we have expanded the scope of “ CO₂ Emission Reduction (Scopes 1 and 2)” to the Hisamitsu Pharmaceutical Group, and the scope of “Sustainability Procurement Survey Response Rate” to Hisamitsu Non-Consolidated and its overseas subsidiaries with production bases. Additionally, we will set “Reduction in the Use of Plastics” and “Waste Plastic Recycling Rate” as new KPIs and work on solving social issues.

Materiality (Priority Issues)	KPI	FY2021 Results	FY2022 Results	Scope
・Creating products and services with enthusiasm for "TE-A-TE" ・Promoting “patch treatment culture” worldwide	Creating products and services that embody the spirit of "TE-A-TE" (Transdermal patches and products and services that embody the spirit of "TE-A-TE")	Rx: ZICTHORU_Ⓡ Tapes (Japan), ORAVI^Ⓡ Mucoadhesive Tablets (Japan) OTC: 1 item (Japan), 4 items (overseas) Others: 5 items (Japan) Launched Hisamitsu_Ⓡ IKIIKI Online drugs	Rx: MOHRUS_Ⓡ Patch 40mg (Hong Kong), OABLOK_Ⓡ Ex Patch (Taiwan) OTC: 9 items (Japan), 10 items (overseas) Others: 8 items (Japan), 11 items (overseas)	Hisamitsu Non-consolidated, overseas subsidiaries
	Expand the number of countries and regions where our products are sold	OTC pharmaceuticals/Others: 33 countries and regions including Japan Rx drugs: Nine countries and regions including Japan	OTC pharmaceuticals/Others: 33 countries and regions including Japan Rx drugs: Nine countries and regions including Japan	Hisamitsu Non-consolidated, overseas subsidiaries
	Environment- and user-friendly drug development (Drug development: product improvement, additional indications, etc.)	<Additional indication> FENTOS_Ⓡ Tapes <Product improvements and others> Rx: 34 products (Japan), 1 product (overseas) OTC and others: 50 items (Japan), 5 items (overseas)	<Indication added> ZICTHORU_Ⓡ Tapes 75mg, ESTRANA_Ⓡ Tapes 0.72mg/0.36mg <Product improvements and others> Rx: 34 products (Japan), 3 products (overseas) Accumulated total: 60 products (Japan), 4 products (overseas) OTC and others: 9 items (Japan), 11 items (overseas) Accumulated total: 51 items (Japan), 16 items (overseas)	Hisamitsu Non-consolidated, overseas subsidiaries
Promoting environmental management	Reduction of CO₂ emissions (Scopes 1 and 2) Reduce by 46% compared to FY2013 by FY2030. Scope: All bases in Japan	Reduce CO₂ emissions by 28.5% (compared to FY2013)	Reduce CO₂ emissions by 30.6% (compared to FY2013)	Hisamitsu Non-consolidated
	Reduction of waste 1）Reduction of industrial waste generated from factories Reduce industrial waste rate by 1.5% by FY2025 compared to FY2020. Waste rate = Industrial waste volume/Total production volume 2）Reduction of “household waste” related to the Containers/Packaging Recycling Act* 10% reduction compared to FY2020 by FY2030 *Not including impact of increase/decrease in sales volume.	1）1.0% increase in industrial waste disposal rate (compared to FY2020)	1）3.0% increase in industrial waste disposal rate (compared to FY2020)	Hisamitsu Non-consolidated
		2）Reduce household waste by 10.2% (compared to FY2020)	2）Reduce household waste by 10.8% (compared to FY2020)	Hisamitsu Non-consolidated
	Sustainability Procurement Survey Response Rate To achieve 100% response rate to the Sustainability Procurement Survey by FY2025. Scope: Primary and secondary suppliers Primary suppliers: Suppliers of raw materials used for manufacturing by the Company Secondary suppliers: Manufacturers of raw materials for Company products without a direct contractual relationship with the Company	Response rate 90% Primary suppliers: 100% Secondary suppliers: 79%	Response rate 100% Primary suppliers: 100% Secondary suppliers: 100%	Hisamitsu Non-consolidated
Supplying high-quality products and services	Zero product recalls Zero product recalls each year.	Product recalled: 0	Product recalled: 0	Hisamitsu Non-consolidated
Supplying high-quality products and services	Product complaint incidence Reduce product complaint incidence to 0.001% or less by FY2025. Scope: Product-related complaints for all products manufactured and sold by the Company	Product complaint incidence: 0.0012%	Product complaint incidence: 0.0010%	Hisamitsu Non-consolidated
Promoting D&I and work style reform	Morale Survey Score (8 items: Rewarding + Good workplace) Raise the average value of 8 items to 5.0 points or more by FY2025.	Average of 8 items: 4.66 points	Average of 8 items: 4.59 points	Hisamitsu Non-consolidated
	Female managers By March 31, 2024, increase to 1.5 times the ratio as of March 31, 2021.	Ratio of women in management positions: 7.1%(as of March 31, 2022) =1.13 times the ratio at the end of March of 2021	Ratio of women in management positions: 7.9%(as of March 31, 2023) =1.25 times the ratio at the end of March of 2021	Hisamitsu Non-consolidated
	Continuous employment ratio of women employees in their 9th to 11th years of employment Increase the continuous employment ratio to 45% or more by March 31, 2024.	Continuous employment ratio: 40.7% (as of March 31, 2022)	Continuous employment ratio: 48.7% (as of March 31, 2023)	Hisamitsu Non-consolidated

Sustainability